Creditors’ Voluntary Winding Up (Commencing 30 July 2020)
Meeting of creditors
The company must cause a meeting of the creditors of the company to be summoned for the day, or the day next following the day, on which there is to be held the meeting of the company at which the resolution for voluntary winding up is to be proposed, and must cause the notices of the meeting of creditors to be sent to the creditors simultaneously with the sending of the notices of the meeting of the company.
The company must convene the meeting of the creditors at a time and place convenient to the majority in value of the creditors, and must —
(a) send notice of the meeting to the creditors at least 10 days before the date of the meeting; and
(b) send to each creditor, with the notice, a statement showing the names of all creditors and the amounts of their claims.
The company must cause notice of the meeting of the creditors to be advertised at least 7 days before the date of the meeting in the Gazette and at least one English local daily newspaper.
The directors of the company must —
(a) cause a full statement of the company’s affairs showing in respect of assets the method and manner in which the valuation of the assets was arrived at, together with a list of the creditors and the estimated amount of their claims to be laid before the meeting of the creditors; and
(b) appoint one of their number to attend the meeting.
The director appointed and the secretary must attend the meeting of the creditors and disclose to the meeting the company’s affairs and the circumstances leading up to the proposed winding up.
The creditors may appoint one of their number, or the director appointed, as the chairperson to preside at the meeting.
The chairperson must determine at the meeting whether the meeting has been held at a time and place convenient to the majority in value of the creditors, and the chairperson’s decision is final.
If the chairperson decides that the meeting has not been held at a time and place convenient to that majority, the meeting lapses and a further meeting must be summoned by the company as soon as is practicable.
The company must, and the creditors may at their respective meetings, nominate a person to be liquidator for the purpose of winding up the affairs and distributing the assets of the company, and if the creditors and the company nominate different persons, the person nominated by the creditors is to be liquidator, and if no person is nominated by the creditors, the person nominated by the company is to be liquidator.
Where different persons are nominated, any director, member or creditor may, within 7 days after the date on which the nomination was made by the creditors, apply to the Court for an order directing that the person nominated as liquidator by the company is to be liquidator instead of, or jointly with, the person nominated by the creditors.
The committee of inspection or, if there is no such committee, the creditors may fix the remuneration to be paid to the liquidator.
On the appointment of a liquidator, all the powers of the directors cease, except so far as the committee of inspection or, if there is no such committee, the creditors approve the continuance of those powers.
If a liquidator, other than a liquidator appointed by or by the direction of the Court, dies, resigns or otherwise vacates the office, the creditors may fill the vacancy and, for the purpose of filling the vacancy, a meeting of the creditors may be summoned by any 2 of their number.
Liquidator’s right to request for statements of concurrence
The liquidator may require any director who has not made the statement of affairs to submit a statement of concurrence verified by affidavit, stating that that director concurs in the statement of affairs.
A statement of concurrence may be qualified in respect of matters dealt with in the statement of affairs, where the maker of the statement of concurrence —
(a) is not in agreement with the persons making the statement of affairs;
(b) considers the statement of affairs to be erroneous or misleading; or
(c) is without the direct knowledge necessary for concurring in the statement of affairs.
Every person who makes a statement of concurrence must submit the statement to the liquidator within 14 days after the request to submit the statement of concurrence, or within such extended time as the liquidator or the Court may specify.
Committee of inspection
The creditors at the meeting or at any subsequent meeting may, if they think fit, appoint a committee of inspection consisting of not more than 5 persons, whether creditors or not, and if such a committee is appointed, the company may, either at the meeting at which the resolution for voluntary winding up is passed or at any time subsequently in general meeting, appoint such number of persons (but not more than 5) as the company thinks fit to act as members of the committee.
The creditors may, if they think fit, resolve that all or any of the persons so appointed by the company ought not to be members of the committee of inspection. If the creditors so resolve, the persons mentioned in the resolution are not qualified to act as members of the committee.
Property and proceedings
Any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of a creditors’ voluntary winding up is, unless the Court otherwise orders, void.
After the commencement of the winding up, no action or proceeding may be proceeded with or commenced against the company except by the leave of the Court and subject to such terms as the Court may impose.
If you would like to know more, please contact Bestar.